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At least 90% of the Greek bailout has paid off reckless lenders

New analysis of IMF figures, released by the Jubilee Debt Campaign, show that almost all of the money lent by the IMF, European governments and the European Central Bank to Greece has been used to pay off reckless lenders, with less than 10% of it reaching the Greek people.

Greece Chains protest 2

Since 2010, the IMF, European governments and the European Central Bank have lent €252 billion to Greece. Over the same period, €232.9 billion has been spent on debt payments, bailing out Greek banks and paying ‘sweeteners’ to speculators to get them to accept the 2012 debt restructuring. This means less than 10% of the money has been used for anything else.

In 2010, virtually all Greek government debt was owed to private entities such as banks. Today 78% is owed to the public sector, primarily people in other Eurozone countries, but also throughout the world through the IMF’s loans.

Tim Jones, economist at the Jubilee Debt Campaign said:

“European and Greek banks have been bailed out, whilst a debt has been left with the Greek people. This is the same unjust response to a financial crisis as happened across much of the developing world in the 1980s and 1990s. Debt needs to be cancelled, and we need a new process for dealing with debt crises so that lenders do not continue to be bailed out, leaving the cost with the public, and incentivising more reckless lending and turmoil.”

The figures are included in a new ‘Six key facts about Greek debt briefing’ released by the Jubilee Debt Campaign ahead of the Greek elections on 25 January.

Syriza, who are leading in the polls, are proposing a conference to agree cancellation of debt to reduce it to a fair level. This is along the lines of the London conference in 1953, which agreed to cancel half of Germany’s debt, and make repayments on the other half contingent on Germany making enough money from trade with the rest of the world to be able to pay them.

The combination of the crashing of the economy and the bailout loans means Greek government debt has grown from 133% of GDP in 2010 to 174% today.

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Germany, Greece
  • Jules G

    I am sharing your posts on the facebook page called Europeans standing by Greeks. Thank you for the information.

  • Keine_Euro_Bonds

    Your statement “90 % to the banks — 10 % to the Greek people” is not true.
    First, your statement that Geece received 252 bn USD by Euro governments, and the ECB , is unsufficient: the truth is that Greece received, in plus, 110 bn USD by ELA of the ECB, plus another 110 bn USD by ECB’s Target2.

    Please look at, Prof. Sinn’s (of Germany) website.

    There you will find an Adobe.pdf “Die griechische Tragödie” (“Greek tragedy”), and there you will find the info:
    1. The comprehensive sum mentioned above has to be particularly reduced 2. A rather precise evaluation on what happened to all the money transferred to Greece. The net transferral was 325 bn EUR (= 360 bn USD). One third of that sum went to the banks. Another one third was spent to improve Greek standard of living (to live better on the cost of others). The last third was spent to finance the Greek exodus of capital: rich Greeks bought real estate objects in London, Paris, Berlin, …. or simply transferred the money to their foreign banking accounts, until Greek government introduced capital transactions controls a few weeks ago.

    • ivas4

      collateral is posted for ELA. this isn’t much different than the repo market.

      Target 2 and ELA are related so you are double counting. Greece is hardly the largest Target2 deficit country (italy and spain are). This is the balance mechanism for the central bank. It is a net net of zero. Not to mention, the deposit flight may have been all according to plan and benefits the banks where the deposits are going.

      this is supposed to be a Union. The US Government wouldn’t cut off funding to a certain state’s banks if that state got in trouble financially. this is the opposite of what the ECB did with ELA

      search “where did the money go” by macropolis to see where the “bailout” money went

    • Quoting:

      “ third was spent to improve Greek standard of living..”

      Bloody nonsense! The standard has fallen, in most professions, I stumble across

  • firstdrafthistorian

    It may be true that the banks were bailed out on the backs of European tax payers but it is also true the Greeks lied, cheated and lived the high life on other people’s money; that they were corrupt from top to bottom; and that they still don’t have a functioning tax system. They should have never been let in the Euro and Europe should cut its losses and throw the bums out. It would cost the Euro little and it would even be better for the Greeks. The free ride for them is over … then we can attack the free ride the banisters are getting.

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